Exam 9: Aggregate Demand and Aggregate Supply

Recall Application 3, "How the U.S. Economy has Coped with Oil Price Fluctuations," to answer the following questions: -According to the application, an increase in the price of oil is similar in effect on consumer incomes as compared to a:

The relationship between the level of prices and the total quantity of goods and services that firms supply in the short- run is:

An increase in taxes shifts aggregate demand to the left.

Suppose that the economy is at a short- run equilibrium below the potential output. Explain the adjustments that the economy experiences as it moves back to potential output.

Prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded are known as:

A decrease in personal income taxes will lead to:

According the short- run aggregate supply curve, the level of overall economic activity:

Recall Application 3, "How the U.S. Economy has Coped with Oil Price Fluctuations," to answer the following questions: -According to the application, surge in the price of oil was caused by the increase in the demand for oil by fast growing countries such as:

List three things that could shift the short run aggregate supply curve to the right.

Figure 9.2 -Refer to Figure 9.2. Suppose the economy is at Point A, an increase in the price level causes a movement to Point:

Rank these three goods in the order of least sticky to most sticky: fresh fish, used cars, steel rods.

What differentiates the short run from the long run in macroeconomics?

Figure 9.1 -Refer to Figure 9.1. A reduction in government spending causes:

The reason why an increase in government expenditure has a more than proportional impact on aggregate demand is known as:

The aggregate demand curve is the sum of all demand curves for all goods and services in the economy.

Which of the following are the factors that affect the short- run aggregate supply curve?

Recall Application 3, "How the U.S. Economy has Coped with Oil Price Fluctuations," to answer the following questions: -According to the application, oil prices in 2008 shot up as high as per barrel.

Recall Application 1, "Measuring Price Stickiness in Consumer Markets," to answer the following questions: -According to the application, shocks to aggregate demand are easily anticipated.

Recall Application 3, "How the U.S. Economy has Coped with Oil Price Fluctuations," to answer the following questions: -According to the application, when the price of oil increases, the aggregate supply curve shifts up because:

The long run aggregate supply curve is vertical.